MGM, Sands, Wynn Shares Could Get New York Casino Boost, Says Analyst

Posted on: April 11, 2023, 03:07h. 

Last updated on: April 12, 2023, 12:19h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The competition for three downstate casino licenses in New York is a long way from being decided. But one analyst is already forecasting potentially significant share price impacts for three contenders.

New York Casino
Times Square in New York City. An analyst sees some big potential winners in the city’s casino competition. (Image: Eater New York)

In a note to clients on Tuesday, Bank of America’s Shaun Kelley observed that the race began in earnest in January and that there are currently 10 groups competing for the trio of New York City-area casino permits.

We estimate the three facilities can combine for $5 billion-plus in annual gross gaming revenue (GGR) and nearly $2 billion in total earnings before interest, taxes, depreciation, and amortization (EBITDA) at stabilization,” wrote Kelley.

Competitors in the fray include US-listed operators such as Bally’s (NYSE: BALY), Caesars Entertainment (NASDAQ: CZR), Las Vegas Sands (NYSE: LVS), MGM Resorts International (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN). Other entrants in the field include Genting, which trades in Asia, and Hard Rock International, the gaming segment of Florida’s Seminole Tribe.

MGM, Sands, Wynn Could Be Big Winners

It’s widely believed, though not yet confirmed by state regulators, that two of the three New York casino permits will be awarded to MGM’s Empire City Casino at Yonkers Raceway and Genting’s Resorts World New York in Queens.

Kelley estimates that if MGM comes away with one of the three permits, the positive impact on the stock price could be $2 to $3 a share. The analyst forecasts a $5 to $6 benefit to shares of Las Vegas Sands, assuming the operator is approved to open a gaming venue in Nassau County. Currently, LVS doesn’t have a domestic property in its portfolio.

The potential benefits to Wynn in New York are substantial, with Kelley estimating a $15 to $18 share price impact in the Big Apple for the operator. Partnering with real estate developer Related Cos., Wynn is aiming to bring a casino hotel to New York City. The companies are eyeing a site at the Hudson Yards near 11th Avenue.

Some analysts believe Wynn could generate as much as a 15% return on investment (ROI) in New York, making the project attractive for the operator and its investors.

Don’t Forget Genting

Perhaps because it’s not operated by a US-based firm, Resorts World New York may be overlooked in the city’s casino competition. It shouldn’t be, and its chances of winning one of the three permits are credible.

Some Queens locals say the gaming venue has been a valuable partner in the community, providing millions of dollars to Queens charities and stepping up to support area residents during the coronavirus pandemic and natural disasters.

Since its opening in 2011, Resorts World New York City has generated more than $3.7 billion in revenue for the state’s lottery education fund, helping to finance high-quality programming for students throughout New York,” wrote Thomas Grech for QNS.

Grech is the chief executive officer and president of the Queens Chamber of Commerce.